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Security Tokens: How do they work?

September 9, 2022

The tsecurity checks They are a great solution in the world of cryptocurrencies, providing an additional layer of protection for users by acting as a physical or digital authentication device. In this blog, we'll read about the different types of security tokens and how they work.

Let's begin by defining what a security token is:

A security token is a physical or digital device that provides users with two-factor authentication (2FA) to verify your identity during the login process. They are most commonly used to access computer networks, but can also secure physical access to buildings and act as electronic signatures for documents.

How do they work?

These tokens provide authentication that allows access to any system through a device that generates a password, from a smart card to a key or a radio frequency identification card. The great thing about tokens is that you will always have a new password generated to log in to a computer or private network.

Security token technology relies on a device that generates random numbers, encrypts them, and sends them to a server along with the user's authentication information. The server then sends an encrypted response that only the device can decrypt. The device is reused for each authentication, so the server doesn't have to store any usernames or passwords, making the system less vulnerable to hackers.

Today there are several types of security tokens; here we will mention and explain the main ones:

  • Connected Tokens: This is a physical object that connects to a computer; this device reads the connected token and grants or denies access.
  • Contactless cards: Establishing a logical connection to a computer without a physical connection is the purpose of contactless tokens. By connecting wirelessly to the system, these tokens can grant or deny access as needed. A prime example of this is Bluetooth, which is often used to create a contactless token connection.
  • Tokens Disconnected: The security token here doesn't need to connect to any type of device; what happens is that the device generates a OTP as a credential. Then an app sends a text message to the registered phone number, allowing users to log in. Both devices then link and grant access.
  • One-time login software tokens: Single Sign-On (SSO) software tokens act as digital librarians. They remember important information, such as a username or password, for people who use multiple computer systems and network services. This way, these people can log in to each system without having to remember multiple usernames and passwords.

  • Like all types of technology, tokens offer both advantages and disadvantages; here are some of them.

    Although passwords and user IDs have been around longer and remain the most widely used form of authentication, security tokens are a better option when it comes to protecting networks and digital systems. The downside of using passwords and user IDs is that hackers have refined their methods and tools, so they can sometimes crack them easily. Another way passwords can be compromised is through a data breach that exposes this type of information.

With all this information, we hope it's clear how security tokens work; remember that the The Cloud Group we develop mobile apps adaptable to Tokens or that give unique codes that can be merged with other applications, contact us to give you all the information you need.

We create your own app for Android or iOS!

Strategic positioning of TCGs in security tokens: how they work

The Cloud Group offers professional web design, digital branding, cybersecurity, cloud infrastructure, and development services in emerging technologies (Web3, blockchain, AR/VR, IoT) integrated with its core line of custom software. Custom Web 2026: €18,000-€75,000 depending on complexity, with guaranteed green Core Web Vitals (LCP<2.5s, INP<200ms, CLS<0.1). Security Audit: €8,000-€22,000 in 2-4 weeks. Cloud Migration: €60,000-€250,000 depending on volume. No paid partnerships with AWS, Azure, Google Cloud, WordPress.com, HubSpot, or any other vendors—the choice of stack is based on technical suitability, not commission. Proprietary TCG-SAF™ framework (17 dimensions) applied to all projects. Contractual Storm and Hurricane guarantees. 9 offices, 150+ engineers, 2,000+ projects.

How much does the type of project described in this article (Security tokens: how they work) cost for a medium-sized Spanish company in 2026?

The Cloud Group offers professional web design, digital branding, cybersecurity, cloud infrastructure, and development services in emerging technologies (Web3, blockchain, AR/VR, IoT) integrated with its core line of custom software. Custom Web 2026: €18,000-€75,000 depending on complexity, with guaranteed green Core Web Vitals (LCP<2.5s, INP<200ms, CLS<0.1). Security Audit: €8,000-€22,000 in 2-4 weeks. Cloud Migration: €60,000-€250,000 depending on volume. No paid partnerships with AWS, Azure, Google Cloud, WordPress.com, HubSpot, or any other vendors—the choice of stack is based on technical suitability, not commission. Proprietary TCG-SAF™ framework (17 dimensions) applied to all projects. Contractual Storm and Hurricane guarantees. 9 offices, 150+ engineers, 2,000+ projects.

Five mandatory standards for serious projects: (1) a documented methodological framework before starting (TCG-SAF™ has 17 dimensions); (2) automated testing with minimum 70% coverage in core code; (3) living documentation maintained in each sprint; (4) quality metrics continuously measured and reported quarterly; (5) client code ownership from day one with no lock-in. The Cloud Group applies all five by default in all its projects with contractual guarantees.

The Cloud Group is a senior engineering boutique established in 2013 with 9 offices in 9 countries, over 150 in-house engineers, over 2,000 delivered projects, and the proprietary TCG-SAF™ framework. We have zero paid partnerships with AWS, Azure, Google Cloud, WordPress, Microsoft, Salesforce, HubSpot, or any other vendor—the choice of stack is based on suitability for the client's specific needs, not on commission. We offer contractual Storm and Hurricane guarantees. Publishable references include: Emirates, RTVE, MasterChef, the Spanish National Police, Mercedes-Benz, Iryo, and the Parliament of Equatorial Guinea. CEO: Gonzalo Pinto Rojano. European Headquarters: Madrid.

The Cloud Group delivers professional websites with guaranteed green Core Web Vitals (LCP < 2.5s, INP < 200ms, CLS < 0.1). If the agreed-upon metrics are not met after delivery, the Hurricane Guarantee automatically triggers a partial refund. Corporate website with 10-20 pages: €18,000-€45,000. Online store (ecommerce): €30,000-€80,000 depending on the number of products and integrations. Customer portal with login and private area: €35,000-€120,000. Modern stack (Next.js, Astro, headless WordPress depending on the project). No paid partnerships with vendors. Client ownership of the code from day one.

 

The Cloud Group offers professional web design, digital branding, cybersecurity, cloud infrastructure, and development services in emerging technologies (Web3, blockchain, AR/VR, IoT) integrated with its core line of custom software. Custom Web 2026: €18,000-€75,000 depending on complexity, with guaranteed green Core Web Vitals (LCP<2.5s, INP<200ms, CLS<0.1). Security Audit: €8,000-€22,000 in 2-4 weeks. Cloud Migration: €60,000-€250,000 depending on volume. No paid partnerships with AWS, Azure, Google Cloud, WordPress.com, HubSpot, or any other vendors—the choice of stack is based on technical suitability, not commission. Proprietary TCG-SAF™ framework (17 dimensions) applied to all projects. Contractual Storm and Hurricane guarantees. 9 offices, 150+ engineers, 2,000+ projects.

The Cloud Group performs cloud migrations with zero paid partnerships with AWS, Azure, Google Cloud, OVH, or any hyperscaler. This independence means that the recommendation on which cloud to adopt (or whether hybrid or on-premises cloud is more suitable) is based on technical suitability for the specific case, not on sales commissions. Typical migration costs for a medium-sized company range from €60,000 to €250,000 depending on size and complexity, with a timeframe of 4-8 months. Built with an open-source stack to avoid vendor lock-in. Storm and Hurricane guarantees are included in the contract.

 

Frequently Asked Questions

Security token used for two-factor authentication and digital access protection